Federal Reserve: “Can We Get A ‘Sieg Heil!’?”
In addition to initiating two major wars and vastly expanding the warfare state, adding on a whole new program to the costly state socialist health insurance boondoggle, innovating new legal interpretations in order to permit torture of mere suspects (including their children), and subjecting increasing numbers of Americans to government surveillance, George W. Bush is about to pull off one more massive Federal power grab before he leaves office:
WASHINGTON - The Bush administration is proposing a sweeping overhaul of the way the government regulates the nation’s financial services industry from banks and securities firms to mortgage brokers and insurance companies.
The plan would give major new powers to the Federal Reserve, according to a 22-page executive summary obtained by The Associated Press.
The Fed would be given broad authority to oversee financial market stability. That would include new powers to examine the books of any institution deemed to represent a potential threat to the proper functioning of the overall financial system.
Wow.
The proposal would allow the Fed, in its new role as “market stability regulator,” to dispatch examiners to check the books not just of commercial banks but of all segments of the financial services industry.
The administration proposal would also consolidate the current scheme of bank regulation by shutting down the Office of Thrift Supervision and transferring its functions to the Office of the Comptroller of the Currency, which regulates nationally chartered banks.
The plan recommends that the Securities and Exchange Commission, which regulates stock trading, be merged with the Commodity Futures Trading Commission, which regulates futures trades for oil, grains and various other commodities.
The plan would create a national regulator for the insurance industry, which is now largely governed by the states, and would create a Mortgage Origination Commission to try to address the abuses exposed in the current tidal wave of mortgage defaults.
The role Federal Reserve Chairman Ben Bernanke and his colleagues have been playing to shore up the financial system would be formalized in the administration plan by giving Fed officials greater power to detect where threats might be lurking in the system.
The “role” that Bernanke’s Fed has been playing to “shore up the financial system” has consisted of doing what the Fed has always done since its inception nearly an entire century ago, which is inflation of the currency all to hell—only more so. It would now appear that hyperinflation is about to be officially codified as standard operating procedure.
And not that it’s exactly a huge surprise considering recent events, but it would appear that the Fed is about to stretch out its giant clawed appendages to just about every corner, nook and cranny of the entire financial system, in response to a crisis of said system that was largely created by the Fed’s own policies in the first place.
As would be expected, the neo-”liberals” are goose-stepping right alongside the neo-”conservatives” on this one, though it would appear they would like to see the neo-conservatives goose-step harder and faster, please:
Many Democrats in Congress are already pushing tougher proposals that would impose much stricter regulation in an effort to crack down on abuses exposed by the current credit crisis.
Sen. Charles Schumer, D-N.Y., said he believed [Treasury Secretary Henry] Paulson’s plan offered some valid suggestions.
“In broad outlines, we agree with large parts of Secretary Paulson’s plan,” Schumer, chairman of the Joint Economic Committee, said in a statement. “He is on the money when he calls for a more unified regulatory structure, although we would prefer a single regulator to the three he proposes.”
Other than their preference for a single jackboot rather than the three proposed by Paulson, the Democrats are right on board. No shocker there, considering the Democrats’ ongoing opposition to the “free markets” we’ve never actually had, which the Republicans always pretend to uphold.
As usual, when the follies of central economic planning become all too apparent, what is the state’s “solution” each and every time, without fail? More central planning.
And it is crystal clear who will benefit the most from this regulatory Great Leap Forward in the financial system:
The plan also seeks to address problems that have been brought to light in recent months since a severe credit crisis began roiling financial markets last August.
That crisis has already claimed as its biggest victim Bear Stearns, the nation’s fifth-largest investment bank, which came to the brink of collapse before a government-arranged purchase by JP Morgan Chase & Co.
(Cross-posted at The Postmodern Tribune.)
March 30th, 2008 at 9:45 am
Coming soon- the complete nationalization of the financial industry. Having a conversation with your “friendly” banker will be the same experience as trying to reason with a TSA thug.
I can also forsee these regulators defining what securities these companies can buy and sell. Example- not allowing purchase of stocks in companies perceived as not doing enough to “fight” global warming, not doing enough to help the plight of so-called “minorities,” etc., etc.
The opportunites are endless for still more creative state mischief.